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View Full Version : 'tax breaks' for parents (from the Bush thread)



heater451
06-02-2003, 06:13 PM
<blockquote><font class="small">Quote txshooter:</font><hr> I think us non-breeders are getting screwed. People with kids get to bring home more than we do, they get tax breaks already that we don't. . .<hr /></blockquote>Although I agree, that DINKs (Dual Income, No Kids) shouldn't get raked on school taxes, I think there may also be some mistaken info in the mix.

(Note: I am not picking on txshooter specifically, as I've seen other posts with the same complaint. The one quoted is the last one I looked at.)

I may be wrong, but the reason that parents have less taxes taken out of their pay, is because they claim more deductions on their tax form(s). This allows them to take home more pay from each check, but I don't think it's an actual "tax break". They will still owe the same income tax at the end of the year, but are more likely to have to pay, because less was withheld.

I've also heard that the IRS doesn't even get red-flagged, unless you try to claim over nine dependents!

Is there an accountant in the house?



========================

06-02-2003, 06:51 PM
You know actually I don't mind the school taxes. I went to public school so I benefited myself from someone else paying these taxes.

06-02-2003, 06:53 PM
It's deductions I am not getting to claim and I have seen many breeders get refunds while I had to pay in. That seems a little unfair. And now they get a $400 check back per kid?

Karatemom
06-02-2003, 07:29 PM
<blockquote><font class="small">Quote heater451:</font><hr>Although I agree, that DINKs (Dual Income, No Kids) shouldn't get raked on school taxes, I think there may also be some mistaken info in the mix.

(Note: I am not picking on txshooter specifically, as I've seen other posts with the same complaint. The one quoted is the last one I looked at.)

I may be wrong, but the reason that parents have less taxes taken out of their pay, is because they claim more deductions on their tax form(s). This allows them to take home more pay from each check, but I don't think it's an actual "tax break". They will still owe the same income tax at the end of the year, but are more likely to have to pay, because less was withheld.

I've also heard that the IRS doesn't even get red-flagged, unless you try to claim over nine dependents!

Is there an accountant in the house?



======================== <hr /></blockquote>Thanks for reminding me to change my W2, LOL. This is true though. Most people do claim more on their W2's so that less is taken out during the year. Unfortunately, most people don't remember, year to year, that it comes back to bite you the next April.

But one has to remember that parents, while they may bring home more with both working, there is more to pay for than if they were childless. Children are anything but CHEAP. And they seem to get more expensive the older they get! LOL.

Anything that they say will benefit the low-middle income population, will in fact also help the rich. You can't give one class a tax break without everyone feeling part of it. If you tax the rich, you're taxing everyone, just the rich pay more than the poor. If you give the poor a tax break, then the rich won't get as much of a break as the poor.

Heide ~ ooohhhh, Socrates, where are you when we need you?

eg8r
06-03-2003, 06:36 AM
Heater you are correct, they do claim more deductions on their W2 (this is a choice, and you can claim just as many as them), however they also have a deduction on their taxes that DINKs do not have. I think this year it will be $1000 / child.

I currently am part of the DINK group, but my wife will have something to say about that in the coming years. /ccboard/images/graemlins/smile.gif There really isn't any "extra" burden on those without kids, because everyones tax is based on income. Once you have kids you get to exercise the breaks.

I also went to a public school for a short time, however I will be sending my children to a private school if money permits. I like the voucher bill, and if I am forced to send my children to a government indoctination center (public school), I hope I can have my choice. /ccboard/images/graemlins/smile.gif

eg8r

Rich R.
06-03-2003, 07:51 AM
<blockquote><font class="small">Quote eg8r:</font><hr> There really isn't any "extra" burden on those without kids, because everyones tax is based on income. Once you have kids you get to exercise the breaks. <hr /></blockquote>
<font color="blue">And if you don't have kids, you never get to "exercise the breaks."
I believe that is an "extra" tax burden. </font color>

<blockquote><font class="small">Quote eg8r:</font><hr> I like the voucher bill, and if I am forced to send my children to a government indoctination center (public school), I hope I can have my choice. /ccboard/images/graemlins/smile.gif <hr /></blockquote>
<font color="blue">So what you are saying is, in addition to paying for public schools, you would like "DINKS", like me, to pay for your child to go to private school.
Since you talk about choices, I believe it is your choice to send your child to a private school and you should pay the entire bill, apart from any school taxes you already pay.
Taking tax money away from an already over stressed public school system, for vouchers, is not the way to get better education for children. JMHO. </font color>

Wally_in_Cincy
06-03-2003, 07:53 AM
<blockquote><font class="small">Quote heater451:</font><hr>
Although I agree, that DINKs (Dual Income, No Kids) shouldn't get raked on school taxes, I think there may also be some mistaken info in the mix.

<font color="blue">I believe educating children benefits society as a whole. But I think vouchers would work better than the public system. The suburban school district where I am right now spends $4500 per year per student and sends probably 65% of the graduates to higher education. The city of Cincy spends </font color><font color="red">$8000 </font color><font color="blue">and has a 50% dropout rate. Money is not the answer. </font color>

(Note: I am not picking on txshooter specifically, as I've seen other posts with the same complaint. The one quoted is the last one I looked at.)

I may be wrong, but the reason that parents have less taxes taken out of their pay, is because they claim more deductions on their tax form(s). This allows them to take home more pay from each check, but I don't think it's an actual "tax break". They will still owe the same income tax at the end of the year, but are more likely to have to pay, because less was withheld.

<font color="blue">No. It's a $1000 per child </font color><font color="red">credit </font color><font color="blue">Not a deduction, a credit. Comes straight off the top of your tax bill. </font color>

I've also heard that the IRS doesn't even get red-flagged, unless you try to claim over nine dependents!

Is there an accountant in the house?


======================== <hr /></blockquote>

SPetty
06-03-2003, 08:07 AM
Here’s a pretty simple plain vanilla example:

Earned income
DINK 60000
DI4K 60000

Exemptions
DINK 2
DI4K 6

Dependent Deductions
DINK 6000
DI4K 18000

Taxable Income (after standard deductions)
DINK 46150
DI4K 34150

Tax (from tax table)
DINK 6326
DI4K 4526

Child Care Credit
DINK 0
DI4K 960 (I think I did that right...)

Adjusted Tax
DINK 6326
DI4K 3566

In this example, the taxpayers with no children pay $2760 more in federal income tax than the taxpayers with children.

heater451
06-03-2003, 09:47 AM
<blockquote><font class="small">Quote SPetty:</font><hr> . . .

Exemptions
DINK 2
DI4K 6

Dependent Deductions
DINK 6000
DI4K 18000

. . .

Child Care Credit
DINK 0
DI4K 960 (I think I did that right...)


. . . .<hr /></blockquote>Thanks for the example!

I understood the 'claiming deductions' part, but didn't allow for the exemptions and credits.

I can see where parents would still wind up paying more to raise their child than the tax breaks allow (clothes, medical care--w/ or w/o insurance, pre-schooling and/or daycare, etc.). I still don't think this makes it alright, for DINKs having to pay certain, "parent" taxes--not that I can think of any besides school taxes right now. . .but, I also understand that where any of my taxes is spent, is not my direct choice.



~~wishes there were an extra refund for NOT having kids
=======================

eg8r
06-03-2003, 10:07 AM
[ QUOTE ]
And if you don't have kids, you never get to "exercise the breaks."
I believe that is an "extra" tax burden. <hr /></blockquote> Look at it how you would like. There is no extra burden. What you pay is the original "agreement" per se. The bonus is having children to exercise the break. Everyone pays the first amount, only those willing to have the children get the break. What you are trying to say is that the tax level is set for families with children, then raised if you do not have children. I am sorry but that is backwards.

eg8r

Rich R.
06-03-2003, 10:18 AM
<blockquote><font class="small">Quote eg8r:</font><hr> What you are trying to say is that the tax level is set for families with children, then raised if you do not have children. I am sorry but that is backwards. <hr /></blockquote>
Whether the tax level is set for families with children, then raised if you do not have children, or set for individuals and lowered, if you have children, does not make much difference. The bottom line is that a household pays less taxes, per person, if there are children. JMHO.

eg8r
06-03-2003, 11:59 AM
Your bottom line is correct, and maybe this is a semantics type issue, however, I still like my way. /ccboard/images/graemlins/smile.gif Think about it this way, nothing is any different for the childless couple. If the couple with child were to not have children then would they have an extra burden? No, they would still fall under the same tax bracket they were before. Nothing has changed. The only difference is that they can no longer exercise the credit. It all starts out with your income. There is no extra burden on the childless couple unless you decide to earn more money.

eg8r

JPB
06-03-2003, 12:28 PM
This issue shows how unfair taxes are. First, I think taxes are way too high across the board. That is my general position. But there is no way you should get a discount for having kids. If anything, kids should cost you more. That is one kid and you would pay an extra 500, two kids an extra 1500, three kids 4000, etc.... I would not have this as a tax policy however. The number of kids you have should be totally irrelevant. If you were irresponsible and had too many kids that you can't afford it's not my problem. I don't care if people struggle financially over choices they made. Have kids or don't, but I should not be burdened in any way because of them. I would go to a flatter tax structure with the top rate (for those who have 1 million or more income annually) would be about 12%. If you made up to 1 million per year the rate should be 10% or less. The average middle-class taxpayer (household income from say 60K to about 500,000 should pay 8-10% of AGI -with all current deductions except kids- max.) But I am slightly conservative economically. /ccboard/images/graemlins/laugh.gif

06-03-2003, 12:42 PM
<blockquote><font class="small">Quote eg8r:</font><hr>Think about it this way, nothing is any different for the childless couple. If the couple with child were to not have children then would they have an extra burden? No, they would still fall under the same tax bracket they were before. Nothing has changed. The only difference is that they can no longer exercise the credit. It all starts out with your income. There is no extra burden on the childless couple unless you decide to earn more money.
eg8r <hr /></blockquote>
I disagree with this. The breeders pay in less tax and get deductions. Think of it this way, you go buy a car. There is a $2750 Discount per child on any car you choose in the lot while the non-breeder has to pay full price. There is no way in Hades this would fly. That car lot would be sued. So why should the government extend this to people who have children? Same principal.

eg8r
06-03-2003, 01:15 PM
How are the breeders paying in less tax? If a childless couple and couple-with-child both make 60k, they both pay in the same amount of income tax. The difference is that come tax time, the IRS takes off $1000 from the taxable income, not the tax paid, from the couple-with-child.

You are right that would not work in car sales. But, you state my reason exactly...Everyone starts out with the same price. There is no extra burden being applied. Only those with the kids get a break, which in turn is a reduced price from the original. No more has been added to the original price.

eg8r

06-03-2003, 01:18 PM
If I am paying more taxes in because people with kids are getting a discount, then yes I am shouldering more of a burden. If you paying more you are burdening more.

eg8r
06-03-2003, 01:26 PM
I don't think you are understanding what I am saying (maybe you are and just looking at it differently).

This is like "Is the glass half-full or half-empty." You are not shouldering more of a burden, since your amount never increased. You are paying in the same amount as you would have if you were with child. Income tax is Income tax anyway you want to look at it.

If you make 60k and your neighbor makes 60k but has a child, you both still paid the same amount in for income tax. At the point in which you file for taxes, the other guys gets a credit for his 1 child. This is a burden the government is taking on. You will see no new increases in your tax amount.

eg8r

06-03-2003, 01:32 PM
Ok so I am looking at it from the glass half empty them. I am paying in April or getting a lower refund than the person who makes the same amount I do and has kids. Plus they get a $400 refund per kid. I don't care you look at it, I am getting screwed on this deal where the breeders are coming out a whole lot better. They can word it as deduction, discount, refund or what ever you want. Bottom line is I will pay more taxes. Now if you bought a car for a $1000 and your neighbor bought a car for $1000, he gets a $400 cash back deal and you didn't. Guess how much your neighbor paid for his car?

eg8r
06-03-2003, 01:56 PM
He paid $1000. Now you understand. The dealer gave him $400. Whether he applied that to the car or his own pocket is his choice. /ccboard/images/graemlins/smile.gif The price for the car is still $1000.

The only way he got it cheaper than you, is if the price was $1000. You pay a thousand and he talked the price down $400. Since this did not happen in your example you both paid a thousand. The dealer then took a hit himself and gave the guy an extra $400 in rebate or what not.

eg8r

eg8r
06-03-2003, 02:34 PM
This is a quote from Thomas Sowell... [ QUOTE ]
"Among the many other questions raised by the nebulous concept of 'greed' is why it is a term applied almost exclusively to those who want to earn more money or want to keep what they have already earned- never to those wanting to take other people's money in taxes or to those wishing to live on the largess dispensed from some taxation."-Thomas Sowell, Visions of the Anointed. <hr /></blockquote>

eg8r

SpiderMan
06-09-2003, 07:48 AM
EG8R, I usually agree with your logic, but here I cannot. If the breeder family pays less, and public services are not cut in proportion, then the shortfall is made up by other taxpayers. And actually, public spending must increase in proportion to the additional children.

Your argument is similar to saying that if a group of people manage to cheat on their taxes and pay nothing, then I still pay no more than I would have. Not true, because my rates could have been lower had others paid their share.

SpiderMan

Wally_in_Cincy
06-09-2003, 08:50 AM
<blockquote><font class="small">Quote SpiderMan:</font><hr> EG8R, I usually agree with your logic, but here I cannot. If the breeder family pays less, and public services are not cut in proportion, then the shortfall is made up by other taxpayers. And actually, public spending must increase in proportion to the additional children.

Your argument is similar to saying that if a group of people manage to cheat on their taxes and pay nothing, then I still pay no more than I would have. Not true, because my rates could have been lower had others paid their share.

SpiderMan <hr /></blockquote>

IMO you are correct. But I still think it's good for the society as a whole to pay for educating the next generation (a little off-topic, talkin' about school taxes there) and also we need the next generation to pay our Social Security and provide a work force. Japan and some countries in Europe are experiencing a problem with a low birth rate. The Euros are lax on immigration for that reason. I think that's part of the reason the US is lax on Hispanic imigration.

eg8r
06-09-2003, 09:01 AM
[ QUOTE ]
Your argument is similar to saying that if a group of people manage to cheat on their taxes and pay nothing, then I still pay no more than I would have. Not true, because my rates could have been lower had others paid their share. <hr /></blockquote> This is not true. The tax system is based on income (not children). If this year, we have more people not pay in taxes than normal, the tax system does not adjust accordingly. You will still pay your same percentage. I guess I am the one having the hard time explaining what I mean. If I pay 28%, and there is a increase of say 10% people drop into the "non-income tax bracket", or 10% of couples suddenly get pregnant (above and beyond the expected amount of expecting families), I will continue to pay my 28%. No more or less.

On the flip-side, if for some reason, no one decided to take advantage of some of the tax breaks/credits available, and everyone paid in the full amount, the tax structure still will not change. I will continue to pay the 28%. The only difference would be the government would have additional money to find ways to spend.

There is no equilibrium and taxes are adjusted to it. I think this is what your example was alluding to.

eg8r

SpiderMan
06-09-2003, 01:34 PM
<blockquote><font class="small">Quote eg8r:</font><hr> &lt;/font&gt;&lt;blockquote&gt;&lt;font class="small"&gt;Quote:&lt;/font&gt;&lt;hr /&gt;
Your argument is similar to saying that if a group of people manage to cheat on their taxes and pay nothing, then I still pay no more than I would have. Not true, because my rates could have been lower had others paid their share. <hr /></blockquote> This is not true. The tax system is based on income (not children). If this year, we have more people not pay in taxes than normal, the tax system does not adjust accordingly. You will still pay your same percentage. I guess I am the one having the hard time explaining what I mean. If I pay 28%, and there is a increase of say 10% people drop into the "non-income tax bracket", or 10% of couples suddenly get pregnant (above and beyond the expected amount of expecting families), I will continue to pay my 28%. No more or less.

On the flip-side, if for some reason, no one decided to take advantage of some of the tax breaks/credits available, and everyone paid in the full amount, the tax structure still will not change. I will continue to pay the 28%. The only difference would be the government would have additional money to find ways to spend.

There is no equilibrium and taxes are adjusted to it. I think this is what your example was alluding to.

eg8r <hr /></blockquote>

Not correct. Your argument might be true for the immediate year because the rules are already set (at 28% in your example). But, if a substantial number of taxpayers found a way to legally stop paying, you would find the tax code revised in short order to increase your future "share" to something more than 28%.

SpiderMan

SpiderMan
06-10-2003, 11:17 AM
<blockquote><font class="small">Quote eg8r:</font><hr> How are the breeders paying in less tax? If a childless couple and couple-with-child both make 60k, they both pay in the same amount of income tax. The difference is that come tax time, the IRS takes off $1000 from the taxable income, not the tax paid, from the couple-with-child.eg8r <hr /></blockquote>

If you reduce the taxable income, you reduce the tax. Tax is based on taxable income.

If they have both paid in the exact amount appropriate to $60K taxable, and one couple gets to reduce that to $59K at filing time, they get a refund.

SpiderMan

eg8r
06-10-2003, 11:37 AM
You are correct the taxable income is reduced, however, throughout the year, they paid in the same as you did. Come tax time, the couple decides to take advantage of a government credit. You did not pay more, you paid the same as you would whether the couple decided to act on the credit or not. That is the point I am trying to make. No taxes were "raised" because you don't have children, and there were no tax shifts to bring everything back to 0. You still pay what you were going to pay (if they had children or not), and they receive a credit from the government. Your taxes were not then immeadiately raise by the government a $1000, were they?

eg8r

SpiderMan
06-10-2003, 11:42 AM
<blockquote><font class="small">Quote eg8r:</font><hr> You are correct the taxable income is reduced, however, throughout the year, they paid in the same as you did. Come tax time, the couple decides to take advantage of a government credit. You did not pay more, you paid the same as you would whether the couple decided to act on the credit or not. That is the point I am trying to make. No taxes were "raised" because you don't have children, and there were no tax shifts to bring everything back to 0. You still pay what you were going to pay (if they had children or not), and they receive a credit from the government. Your taxes were not then immeadiately raise by the government a $1000, were they?

eg8r <hr /></blockquote>

I explained that in my response yesterday, please check the thread a few lines up.

Bottom line is a certain amount of revenue will be raised. If the tax code is adjusted to allow some to pay less, the shortfall will be made up by requiring others to pay more. In your example, it would have already been built into the $60K rate that only one of your couples actually has to pay. No free lunch, sorry.

SpiderMan

Wally_in_Cincy
06-10-2003, 11:48 AM
<blockquote><font class="small">Quote eg8r:</font><hr> You are correct the taxable income is reduced, ....<hr /></blockquote>

Actually the child thing is a <font color="blue">credit </font color>not a deduction. If a couple made $60,000 and owed $7000 in taxes, after the credit they would only owe $5000

eg8r
06-10-2003, 12:12 PM
[ QUOTE ]
Bottom line is a certain amount of revenue will be raised. If the tax code is adjusted to allow some to pay less, the shortfall will be made up by requiring others to pay more. <hr /></blockquote> This is absolutely untrue in the current tax year, or any tax year being considered current at that time. This year, my tax amount will not go up, if a large percentage of "extra" people were to get pregnant and claimed them in April. I still am only obligated to pay what was set then. Could the rates get changed for this next year, possibly but nothing was increased during the year I paid in, therefore I did not pay in any extra amounts.

eg8r

SpiderMan
06-10-2003, 12:29 PM
<blockquote><font class="small">Quote eg8r:</font><hr> This year, my tax amount will not go up, if a large percentage of "extra" people were to get pregnant and claimed them in April. I still am only obligated to pay what was set then. Could the rates get changed for this next year, possibly but nothing was increased during the year I paid in, therefore I did not pay in any extra amounts.

eg8r <hr /></blockquote>

Then you were denied an opportunity to pay less, so that someone else could pay less.

SpiderMan

eg8r
06-10-2003, 02:13 PM
LOL, this is going forever. /ccboard/images/graemlins/smile.gif

[ QUOTE ]
Then you were denied an opportunity to pay less, so that someone else could pay less. <hr /></blockquote> I was not denied the opportunity to pay less so that someone else could pay less. I was denied the opportunity to pay less because I did not have one of the requirements that was vital to pay less. I guess you could call that my fault or my choice, either way, I do not get the credit. I am not choosing to pay more, rather I am choosing not to pay less (semantics?).

eg8r

Qtec
06-10-2003, 02:34 PM
[ QUOTE ]
I did not have one of the requirements that was vital to pay less. <hr /></blockquote>

"Like children maybe". /ccboard/images/graemlins/grin.gif

Q

eg8r
06-10-2003, 03:42 PM
Are you just trying to boost your post count? What the heck do you think the entire thread was about?

Thanks for playing the game.

eg8r

heater451
06-10-2003, 05:08 PM
The amounts paid in are the same, but the credit/refund for children results in the non-breeders paying more. I think an arguing point might still exist, if the credit is **expected**.

It's similar to two people sitting on the couch, and the doorbell rings. Regardless of their actual sitting distances from the door, whichever one answers the door will be forced to walk farther than the other to open it.



=======================

SPetty
06-10-2003, 05:16 PM
<blockquote><font class="small">Quote heater451:</font><hr> The amounts paid in are the same...<hr /></blockquote>I may have totally lost track of the discussion point, but the amounts paid in are normally different. You get deductions for each dependent you claim. If you claim them for your paycheck, if you have children, you pay in less each paycheck. This corresponds to paying less when you file your taxes, because if you have children, each of them counts as a dependent and you deduct some amount from your earned income before your tax is computed.

I posted an example based on a real 1040 form earlier in this thread.

If anyone still has any questions, visit www.irs.gov (http://www.irs.gov) for the forms and the instructions and the deductions and the credits...

eg8r
06-10-2003, 06:22 PM
[ QUOTE ]
If you claim them for your paycheck, if you have children, you pay in less each paycheck. <hr /></blockquote> Quite and "IF". I can claim anything I want against the paycheck. I know quite a few single people that claim 5 on their w-4 so that less is taken out each paycheck. They feel they will use their money a little wiser than the government for the time being. Because of this I don't feel I pay more taxes than them. Same as with the child.

eg8r

SPetty
06-10-2003, 10:31 PM
<blockquote><font class="small">Quote eg8r:</font><hr>I can claim anything I want against the paycheck. ... Because of this I don't feel I pay more taxes than them. <hr /></blockquote>??? Like I said, I must be losing track of the point here. Of course you can claim anything you want against the paycheck and have a lot or a little taken out to prepay your taxes. But, regardless of how much you have withdrawn from your paycheck every payday, you definitely pay more taxes at tax time than someone just like you with the same filing status as you that makes the same money as you do if they have children. What you have taken out of your paycheck each time is not the same thing as what you pay in taxes every April 15 (or later if you file your extension... /ccboard/images/graemlins/smile.gif )

eg8r
06-11-2003, 10:30 AM
Yeah for extensions. /ccboard/images/graemlins/smile.gif

I agree each paycheck does not matter at all (that is what my previous post was about). I think you were the one that brought up the individual paychecks but it really does not matter, we agree. As far as tax time, it is more a matter of semantics. DINKs do not pay more they pay the correct amount based on the pay scale. They also choose not to pay less by not having children. Both groups are liable for the same amount of tax, however the couple-with-child get a credit at the very end.

I think I am getting a little worn out on this thread. It really seems to be the same as "Is the cup half full or half empty" /ccboard/images/graemlins/smile.gif

eg8r

SPetty
06-11-2003, 11:27 AM
<blockquote><font class="small">Quote eg8r:</font><hr>I think you were the one that brought up the individual paychecks ...

As far as tax time ... DINKs do not pay more they pay the correct amount based on the pay scale.<hr /></blockquote>No, I didn't bring up the individual paychecks.

Regardless of how you couch your language, all else being equal (except the number of children), on IRS Form 1040 line #41 "Taxable income", DINKs have a higher number. So, continuing on the form, on line #42 "Tax", DINKs have a higher number.

They both "pay the correct amount", but compared to the "breeders", the DINKs pay more federal income tax. Which is all anyone here is saying.